Yet another big city is following the same path to destruction for many of the same reasons. While not yet in the dire straits that caused Detroit's failure, it is heading there at gathering speed. It has been cutting back on vital services like police, closing schools, and is carrying pension obligations that are seriously underfunded. Violent crime is on the rise, and people and businesses are leaving in increasing numbers. Doing business in the city has been difficult for a long time but has been made even more difficult because of rising taxes, higher business 'fees', and an ever less responsive bureaucracy.
What city is this that is at the precipice and faces a fate like that of Detroit?
It looks like Detroit may yet have competition for the distinction of America’s most poorly run city. The unprecedented triple-drop in Chicago’s bond rating and the city’s shiny new long-term debt figure—$29 billion—should have pols quaking in their boots.The only advantage Chicago has over Detroit is that it still has time to fix its problems. The question is whether or not the Powers-That-Be in the Windy City will recognize the city's actual problems versus its perceived problems. If history is any indicator, the answer is a resounding “NO!” They will likely continue on the path they have followed for decades and end up in the same condition as Detroit.
It hasn’t all hit the fan quite yet, but Chicago seems perilously close to real trouble. The city is all out of money, and with an imploding public education system and harrowing levels of violence, it is losing residents fast. Illinois, which itself lost more than 800,000 people to out-migration in the past two decades, is essentially Chicago on a larger scale, with hundreds of billions in unfunded pension liabilities and complete political sclerosis. The state cannot bail out Chicago, and judging by the feds’ reluctance to even lift a finger for Detroit, Chicago shouldn’t expect much more.